The central government has scrapped the Rs 17,000 crore helicopter deal with European aviation consortium, Eurocopter, accusing it of 'deviating from approved parameters' of the choppers urgently required for the army.

"A fresh Request for Proposals will be issued shortly," Defence Ministry spokesman Sitanshu Kar said.

Eurocopter and US firm Bell Helicopters were shortlisted for the contract, which visualised purchasing 60 helicopters off the shelf and the rest 137 being manufactured in India under technology transfer.

The cancellation comes at a time when the $4 billion deal was almost at the finalisation stage with defence ministry officials carrying out price negotiation with the France-based company.

This is the second major defence deal to be scrapped this year. Earlier, the defence ministry had cancelled international tenders for the Rs 4,000 crore deal to purchase 400 upgraded 155 mm 52 calibre guns for the Army.

Eurocopter had earlier in the day claimed that it was very much in contention in the race to acquire 197 light helicopters and was expecting the deal to be finalised in the 'coming weeks.'